Dive Brief:
- Following high inflation, offline retail sales, excluding auto and gas, reached $3.6 trillion in 2022 and are predicted to reach $4.2 trillion by 2028, according to a new Forrester report. By 2028, U.S. offline sales will make up 72% of the retail market.
- Citing its 2022 Retail Benchmark Recontact Survey, Forrester noted that nearly a third of U.S. survey respondents said they enjoy in-store shopping and spending time outside their homes.
- Click-and-collect sales, which include buy online, pick up in store and curbside pickup transactions, are projected to surpass $100 billion this year. Forrester projects that click-and-collect sales will exceed $200 billion by 2028 and comprise 12% of U.S. online retail sales.
Dive Insight:
Forrester attributed the rise in offline sales to high inflation. Though the COVID-19 pandemic catalyzed a spike in online retail, U.S. offline retail sales rose 14% year over year in 2021, a change the report said was driven by the easing of coronavirus restrictions.
While physical stores may be critical for retailers overall, having a brick-and-mortar presence could be essential for the resale market, which is currently going through a boom. Despite the popularity of secondhand retail, it’s a niche that needs, for the most part, stores in order to be profitable, according to experts.
In addition to resellers, direct-to-consumer brands have branched out into physical storefronts, which can help raise brand awareness and ease e-commerce costs, but has been challenging for some brands as well. Morphe, for example, shuttered its U.S. stores and parent company Forma Brands filed for bankruptcy earlier this year.
For a major retailer like Walmart, an extensive physical store reach has been an asset. In April, Walmart U.S. CEO John Furner referred to its stores as “the key nodes” in its omnichannel business.
Following the e-commerce boom in 2020, online retail sales are expected to continue to grow more moderately in the near term. Last month, FTI Consulting released a report indicating that U.S. e-commerce sales will surpass $1.1 trillion in 2023, a 10% bump year over year. FTI projects that yearly online sales growth will be about 10% or less in the coming years.
